ESBD_567618_1791984677064_Exhibit_G- SOW_final.pdf

Exhibit G: Scope of Work (SOW) To Be Performed

1. Contractor Responsibilities

Awarded Contractor must:

1.1 Be registered under the Food, Drug and Cosmetic Act with the U.S. Department of Health and Human Services and ensure its products are in compliance with Federal regulations issued pursuant to Public Law (P.L.) 100-237. Contractor must certify with the States’ and CNO’s health department that their infant formulas comply with the Federal Food, Drug, and Cosmetic Act and regulations issued pursuant to the Act. Notify the States and CNO within 48 hours of any violations of the Federal Food, Drug and Cosmetic Act and/or regulations issued pursuant to the Act throughout the duration of the contract. Notify the States and CNO within 48 hours of any manufacturing quality concerns or inspection findings which could reasonably be anticipated to negatively impact supply of the Contract infant formula to WIC Participants within all or part of the States’ and CNO’s jurisdiction.

1.2 Be able to deliver the required quantity of milk and/or soy-based infant formula (excluding Exempt Infant Formula) to the States’ and CNO’s WIC approved Vendors within the retail delivery system currently operating in each of the States and CNO. Participation and issuance data provided in solicitation materials may not reflect the required quantity throughout the Contract term. Supply is considered inadequate any time WIC Participants' ability to reasonably purchase the milk and/or soy-based infant formula (except Exempt Infant Formula) using WIC benefits is impeded within all or part of the States’ and CNO’s jurisdiction.

1.3 Have access to production sources necessary to meet the required quantity and quality of the specified milk and/or soy-based infant formulas (excluding Exempt Infant Formula).

1.4 Guarantee the Contract formulas are labeled and distributed under the same brand names when sold by WIC Vendors and available to all potential retailers throughout the States and

CNO.

1.5 Contact major wholesalers in the States and CNO and authorized WIC retail outlets to assure adequate knowledge that the Contractor’s milk and/or soy-based brands of infant formula (excluding Exempt Infant Formula), suitable for routine issuance to the majority of generally healthy full-term infants, will be designated the “Primary Contract Milk and/or Soy- Based Brand(s)” of WIC infant formula as of the effective Contract date in each of the States and CNO.

1.6 Verify on request from the States and CNO whether the State and CNO’s current WIC Vendors and Vendor applicants and distributors supplying current WIC Vendors and Vendor applicants are purchasing Contract infant formula directly from the Contractor or directly from the manufacturer (7 CFR 246.12(g)(10)).

1.7 Provide one-hundred twenty (120) days' notice to the States and CNO for:

A. Discontinuation of a Contract brand infant formula B. Changes to a Contract brand infant formula, including:

i. Name,

ii. Formulation,

iii. Packaging,

iv. Label,

v. Unit size,

vi. UPC; and

vii. Reconstituted ounces.

C. Failure to meet product notification requirements may result in the issuance and redemption of a brand or size of milk and/or soy-based infant formula (excluding Exempt Infant Formula) which is different from the Contractor’s at the States’ and CNO’s discretion. Contractor must pay the Rebate amount that yields the same net cost per reconstituted ounce for non-Contract milk and/or soy-based infant formula (excluding Exempt Infant Formula) issued due to failure to meet product notification requirements.

1.8 Create new Universal Product Codes (UPCs) due to changes in unit size or reconstituted ounces per container.

This requirement may be waived at the States’ and CNO’s option if the change in size or ounces does not result in a change to the formula quantity provided by WIC during any month within a food package.

1.9 Provide and pay Rebates (See 7 CFR 246.2 Definitions) on any milk and/or soy-based infant formula in its product line (excluding Exempt Infant Formula) and in any size can that the States and CNO choose to issue in the following forms: Liquid concentrate; Powder and Ready-to-feed.

Ready to feed may be issued as outlined in 7 CFR 246.10(e)(1)(iv) and 7 CFR 246.10(b)(1)(ii).

1.10 Provide and pay Rebates on any milk and/or soy-based formula in its product line (excluding Exempt Infant Formula) that is issued to women or children with medical documentation.

1.11 Provide and pay Rebates on primary milk and/or soy-based infant formula products (excluding Exempt Infant Formula) that comply with all provisions of Table 4 of 7 CFR part 246.10(e) (12), throughout the duration of the Contract. Changing a Contract formula in such a way that it no longer meets federal regulations as outlined in Table 4 of 7 CFR part 246.10(e)

(12) is considered a breach of Contract.

1.12 Provide and pay Rebates on Contract brands (if any) other than the primary milk and/or soy-based infant formula (excluding Exempt Infant Formula) that do not meet the regulations listed in Table 4 of 7 CFR part 246.10(e)(12) only if issued with medical documentation at the States’ and CNO’s discretion pursuant to 7 CFR 246.10(e)(1)(iii).

1.13 Provide and pay Rebates on Contract brands (except Exempt Infant Formula) if the regulations as described in Table 4 of 7 CFR part 246.10(e)(12) change during the Contract such that a given formula subsequently meets the new regulations following the change. These formulas may then be issued and receive Rebate without medical documentation at each States’ and CNO’s discretion.

1.14 Recalculate the Rebate amount for a Contract milk and/or soy-based infant formula (excluding Exempt Infant Formula) whose unit size changed to yield the same net cost per reconstituted ounce as was applied to the original unit size.

1.15 Recalculate the Rebate amount for a replacement primary milk and/or soy-based Contract infant formula (excluding Exempt Infant Formula) due to product discontinuation to yield the same net cost per reconstituted ounce as was applied to the original formula.

1.16 Calculate the Rebate amount for formulas other than the primary milk and/or soy-based formulas that the States and CNO choose to issue to be equal to the percent Rebate for the same physical form of the primary milk and/or soy-based formula. For example: if the percentage Rebate of the primary powder formula is ninety percent (90%) then all other powder Contract formulas must also receive a ninety percent (90%) Rebate.

The same calculations apply regardless of the timing or duration of the States and CNO choosing to issue Contract infant formula(s) other than the primary milk and/or soy-based infant formula (excluding Exempt Infant Formula). The Rebate amount will be equal to the percent Rebate established at the beginning of the Contract for the same physical form of the primary milk and/or soy-based formula applied to the lowest national wholesale Full Truckload prices per unit at the time of bid opening and automatically increased or decreased on a cent-for-cent basis as described in section 1.19 of this Exhibit. For example: if the percentage Rebate of the primary powder formula is ninety percent (90%) and a powder Contract formula other than the primary’s price is ten dollars ($10) at the time of bid opening and twelve dollars ($12) at the time the States and CNO choose to begin issuing it, the Rebate at that time will be eleven dollars ($11) (90% x $10, + $2 cent-for-cent increase).

New unit sizes introduced by the Contractor after bid opening will receive a Rebate amount that yields the same net cost per reconstituted ounce as the closest size of the same Contract formula, by type and form, except as provided in section 1.14 of this exhibit.

1.17 Include and provide Rebate on any new milk and/or soy-based infant formulas (excluding Exempt Infant Formula) if introduced by the Contractor during the period from bid opening to the beginning of the Contract effective date and throughout the term. The Rebate percentage established at the beginning of the Contract is applied to any new formula of the same physical form. For example: if the Rebate percentage for a powder milk and/or soy-based infant formula is ninety percent (90%), then any new powder milk and/or soy-based infant formula would receive the same Rebate percentage.

1.18 Calculate the Rebate amount for the new milk and/or soy-based infant formula (excluding Exempt Infant Formula) as follows: The manufacturer’s lowest national wholesale Full Truckload price per unit as of the date the milk and/or soy-based infant formulas (excluding Exempt Infant Formula) are approved for issuance by the States and CNO is multiplied by the Rebate percentage established at the beginning of the Contract for the same physical form. For example: if the manufacturer’s lowest national wholesale Full Truckload price per unit of powder milk and/or soy-based infant formula (excluding Exempt Infant Formula) is ten dollars ($10) and the Rebate percentage is ninety percent (90%), then the Rebate amount would be ten dollars ($10) multiplied by ninety percent )90%), or nine dollars ($9).

1.19 Remit to the States and CNO a Rebate amount for Contract milk and/or soy-based infant formula (excluding Exempt Infant Formula) shown as purchased during the Contract period. The Rebate amounts as set forth on the Bid Sheet(s) will be automatically increased or decreased on a cent-for-cent basis for each brand, type, form, and size of formula by any changes to the lowest national wholesale Full Truckload prices per unit that occur subsequent to bid opening prior to the Contracts’ initial effective date, on the Contracts’ initial effective date, or after the Contracts’ initial effective date ( 7 CFR §246.16a(c)(7)(iv)). These Rebate price adjustments will continue to be made for price changes throughout the Contract period. The Rebate price increase or decrease shall be effective on the first day of the same month that the price change occurs in accordance with the Contractor's lowest national wholesale price for a Full Truckload increases or decreases.

1.20 Notify the States and CNO in writing of price increases and decreases by submitting their revised wholesale price list no later than sixty (60) days prior to any change in wholesale prices.

1.21 Give notice within forty-eight (48) hours of becoming aware of the Inadequate supply or anticipated Inadequate supply. If supply is only partially affected, the notice must include an estimate of the allocation that can be supplied and the estimated date on which capacity to fully supply is expected to occur. The Contractor must allocate supply among its various customers (then under Contract for similar products) in a commercially fair and reasonable manner.

1.22 Provide the following information within seventy-two (72) hours of becoming aware of the Inadequate supply or anticipated Inadequate supply in the event of an Inadequate supply (shortage) or anticipated Inadequate supply of a milk and/or soy-based infant formula (except Exempt Infant Formula):

• the name of the specific formula (or formulation), the unit size(s), the form (powder, liquid concentrate or ready-to-feed),

• the specific problem that prompted the shortage,

• how long the shortage is expected to last,

• suggested alternative formulas (formulations) that are in adequate supply,

• details of how the Contractor is implementing the agreed upon supply disruption action plan (specified in section 1.34 of this exhibit) to meet infant formula demand and limit disruption to WIC Participants, with an appropriate corrective action plan to resolve the issue. The corrective action plan should include detailed specifics on the Contractor’s current and planned actions to deliver the required quantity of milk and/or soy-based infant formula (excluding Exempt Infant Formula) to the States’ and CNO’s WIC approved Vendors within the retail delivery system currently operating in each of the States and CNO, including but not limited to any direct coordination with WIC retailers or their distributors (for example, revised allocations or plans to modify allocation or expedite product delivery to resolve the issue) or other planned remedies. And,

• the Contractor’s website address, name, email, and the phone number of the Contractor’s employee who is the contact person with respect to the shortage.

1.23 If the State or CNO’s Contract point of contact notifies the Contractor of Inadequate supply based on information the State receives (including but not limited to redemption data, client or Local Agency reports, or vendor information), the Contractor must provide the information outlined in 1.21 within forty-eight (48) hours of this notice and the information outlined in 1.22 within seventy-two (72) hours of this notice.

1.24 Pay the Rebate amount for any alternate form(s) of a Contract milk and/or soy-based infant formula (excluding Exempt Infant Formula) that yields the same net cost per reconstituted ounce as for the original form that is in short supply, if the change in form would otherwise increase costs to the States and CNO.

1.25 Pay the Rebate amount for all forms of non-Contract, FDA approved, milk and/or soy-based infant formula(s) (excluding Exempt Infant Formula), that yields the same net cost per reconstituted ounce if the alternate form of the Contract milk and/or soy-based infant formula is not available until the Contract formula can be supplied. If the wholesale price of such a non- Contract FDA approved, milk and/or soy-based infant formula (excluding Exempt Infant Formula) is not available or cannot be obtained within 30 days of the States’ and CNO notifying the Contractor of the intent to offer non-contract formula, Contractor will pay the same Rebate per reconstituted ounce as that paid for the primary Contract formula in the same form.

1.26 Not be liable for any delay in supply, or failure to supply when such delay or failure is caused by war, riots, insurrection, civil commotion, fire, flood, accident, storm or any act of God, or other causes beyond the Contractor's control that by exercise of due foresight Contractor could not reasonably have been expected to avoid, and which, by the exercise of all reasonable due diligence, Contractor is unable to overcome.

1.27 Assist the States and CNO by providing the appropriate form and type of Contract brand milk and/or soy-based infant formula to WIC Participants in the event of a natural disaster such as hurricane, earthquake, tornado, flood or other act of God, or in the event of an emergency, such as an act of terrorism or war, epidemic, power failure, public water supply interruption, or other emergency situation that severely restricts the ability of WIC Participants to obtain or to safely mix or store the Contract brand milk and/or soy-based infant formula.

1.28 Assist by allowing the States and CNO, at their discretion, to purchase ready-to-feed milk and/or soy-based infant formula (excluding Exempt Infant Formula) for WIC Participants in the areas of the state lacking safe water supply or electricity and for areas where victims of the disaster or emergency have taken refuge. The States and CNO recognize that there may be additional shipping costs incurred by the Contractor if that is the form of assistance requested.

Those costs would be determined and agreed upon at the time of the emergency request.

1.29 This flexibility is optional and should not be considered when determining bid pricing:

When mutually agreed, assist by allowing the States and CNO, at their discretion, to purchase appropriate form(s) of milk and/or soy-based infant formula (excluding Exempt Infant Formula) in the event of an emergency or shortage for direct shipment by the contractor to WIC participants, allowing participants to order directly from the contractor. Agree that the cost to the States and CNO for purchasing milk and/or soy-based infant formula (excluding Exempt Infant Formula) under this provision must be the lowest national wholesale Full Truckload price in effect on the purchase date, reduced by the per-form percentage rebates. Utilization of this provision will in no way impact the contractor’s responsibility to ensure provision of milk and/or soy-based infant formula (excluding Exempt Infant Formula) through the retail delivery system currently operating in each of the States and CNO, nor does it impact the States and CNO’s right to exercise any other contractual provision.

1.30 Agree that the cost to the States and CNO for purchasing milk and/or soy-based infant formula (excluding Exempt Infant Formula) under this provision must be the lowest national wholesale Full Truckload price in effect on the purchase date, multiplied by the per-form percentage rebates.

1.31 Notify the Contract point of contact and one other designee for each State and CNO by telephone and email within twenty-four (24) hours of the Contractor’s awareness of a problem in the event of a formula recall in any jurisdiction of the United States. If the release of this information to the general population occurs within twenty-four (24) hours of the Contractor’s awareness of a problem, the Contractor must notify the Contract point of contact and one other designee for each State and CNO by telephone and email no later than the release of this information to the general population.

1.32 Provide the following information in the event of a recall of the milk and/or soy-based infant formula (excluding Exempt Infant Formula): the name of the specific formula (formulation), the unit size(s), the form (powder, liquid concentrate, or ready-to-feed), the lot number(s), the expiration date(s), the inventory code(s), the specific problem or concern with the product, and the name and phone number of Contractor’s employee who is the contact person with respect to the recall.

1.33 In the event of a recall of the milk and/or soy-based infant formula (excluding Exempt Infant Formula), provide instructions for staff, Participant, and WIC Vendor use explaining what to do with or where to send the affected product and how to receive replacements for product already purchased.

1.34 Submit to each State and CNO a supply disruption action plan consistent with Section 17 of the Child Nutrition Act of 1966 (CNA; 42 USC 1786) as amended by the Access to Baby Formula Act of 2022 (ABFA; PL 117-129) and with all provisions outlined in this Statement of Work. The Contractor’s supply disruption action plan must be submitted to each State and CNO no later than 60 calendar days before the effective date of the Contract and will comply with the approved Corrective Action Plan issued, identified in Section 12.5 of the Solicitation.

The supply disruption action plan must indicate how the Contractor will respond to supply disruptions identified by the Contractor or State, recalls, and emergencies. The supply disruption action plan must account for all of the manufacturing plants, distribution centers or distribution points, and transportation systems that the Contractor uses to deliver the required quantity of milk and/or soy-based infant formula (excluding Exempt Infant Formula) to the States’ and CNO’s WIC approved Vendors within the retail delivery system currently operating in each of the States and CNO. Specifically, this plan will detail the steps to identifying the issue, assessing the quantity and duration of the expected disruption, acquisition plan, logistic plan and timeline to immediately offset the expected disruption and long-term plan for sustainability until the normal supply chain is restored. If the Contractor intends to use allocation, the Contractor must explain how they will ensure access for WIC Participants throughout all of the State’s and CNO’s jurisdiction and indicate when the allocation is anticipated to end. The supply disruption action plan must include weekly meetings throughout the supply disruption between the Contractor and the States and CNO at the States’ and CNO’s option.

The supply disruption action plan must be reviewed by the Contractor at minimum once per calendar year and the Contractor must notify the States and CNO, in writing, either that there are no changes or submit to the States and CNO, in writing, any revisions to the supply disruption action plan for approval. The States and CNO may accept or reject revisions to the supply disruption action plan at their discretion within 60 days of receiving notification from the Contractor.

1.35 Maintain documentation for all payments made to the States and CNO under the Contract(s). The books, records, and documents of the Contractor, insofar as they relate to work performed or money remitted under the awarded Contract(s), must be maintained for a period of three (3) full years from the date of the final payment and all other pending matters are closed. The records are subject to audit, at any reasonable time and upon reasonable notice, by the States and CNO, USDA, the Comptroller General of the United States, or their duly appointed representatives.

1.36 Not have access to any records, information, or combination of information individually identifying applicants, Participants or family members (7 CFR 246.26(d), WIC Policy Memorandum #2021-6).

1.37 Not have access to any information about a WIC Vendor that individually identifies the Vendor, except for the Vendor's name, address, telephone number, website/email address, store type and authorization status. (7 CFR §246.26(e)).

1.38 Abide by FNS Instruction 800-2, which can be accessed at:

https://www.fns.usda.gov/sites/default/files/resource-files/800-2-WICProg- UseofWICAcronymandLogo-508.pdf, and the WIC Policy Memorandum #2009-1, which can be accessed at: https://fns-prod.azureedge.us/wic/clarification-use-wic-acronym-and-logo, and agree that the WIC Acronym and the WIC Logo are service marks owned by USDA, and that all rights therein and goodwill pertaining thereto belong exclusively to USDA. Contractor will not use these service marks in any manner on its goods or their containers or packaging or on tags or labels affixed thereto. Contractor will not use the WIC Acronym in advertising in any manner https://www.fns.usda.gov/wic/policy-memorandum-2021-6 that is likely to cause confusion, mistake, or deception as to the affiliation, connection, or association of the Contractor with the WIC Program or as to the sponsorship or approval of the Contractor’s goods, services, advertising, or commercial activities, including nutritional message(s), by the WIC Program, USDA, or the States and CNO. Contractor will include the following statement with any use of the WIC Acronym in advertising: “WIC is a registered service mark of the U.S. Department of Agriculture for USDA’s Special Supplemental Nutrition Program for Women, Infants and Children”.

1.39 Agree to not directly market, solicit materials, offer to provide trainings for or communicate with WIC local agency staff unless authorized by the State Agency or CNO Agency WIC staff.

1.40 Agree to comply with all terms expressed within the IFB.

2. State and CNO Responsibilities

States and CNO must:

2.1 Provide formula benefits that designate the primary Contract brand of milk and/or soy-based liquid concentrate/powder/ready-to-feed formulas. States and CNO at their discretion may also provide any other milk and/or soy-based infant formula (excluding Exempt Infant Formula) in the Contractor’s milk and/or soy-based infant formula product line that meet the specifications as described within. States and CNO may issue infant formula in some or all unit sizes at their discretion, including unit sizes that exceed the maximum monthly allowance for the duration of any applicable regulatory waivers.

2.2 Issue invoices for food benefit transactions that reflect the number of units shown as purchased for a billable period.

2.3 Inform the Contractor five (5) business days prior to any change in billing period.

2.4 Have no liability except as specifically provided in the Contracts awarded because of the IFB.

2.5 Notify Local WIC agencies, Contracted retailers, and appropriate physicians of the successful Bidders' milk and/or soy-based brands of allowable infant formulas (excluding Exempt) if the successful Bidder is different from the current Contractor.

2.6 Monitor WIC Vendors for compliance with Federal regulations.

2.7 Not require the Contractor to provide gratis items such as sample units of milk and/or soy-based infant formula (excluding Exempt) and /or educational material such as brochures or flyers.

2.8 Agree to first issue the Contract milk and/or soy-based infant formula (excluding Exempt Infant Formula) in another physical form if the Contractor is unable to supply it for as long as supply for that form is sufficiently available with the exception that powder and liquid concentrate forms may not be substituted for ready-to-feed. The States and CNO will next issue an appropriate alternate Rebate eligible brand if the supply for that form is sufficiently available. The States and CNO will have the final authority to determine if the alternate formula meets the nutritional needs. The States and CNO will issue a non-Contract non-exempt formula produced by another manufacturer due to a recall or a supply disruption projected to last more than five (5) consecutive business days and have impact at the States and CNO or county level.

The States and CNO will discontinue issuance of alternate Rebate eligible brands and non-contract non-exempt formula when the States and CNO determine, at their discretion, that supply of the Contract milk and/or soy-based infant formula is adequate. Redemption of alternate Rebate eligible brands and non-contract non-exempt formula will occur through the last day of the benefit month in which supply is determined to be adequate.

2.9 Be allowed to purchase and receive Rebates without medical documentation on non- Contract milk and/or soy-based infant formula (excluding exempt) in lieu of the Contract formula if the Contractor was unable to supply product as set forth in section 1.2 of this exhibit.

The purchases may or may not be indicated as non-Contract products on eWIC cards and invoices depending on how each State and CNO processes such changes.

2.10 Retain all Contract records for a minimum of three (3) years from the end of the contract.

2.11 May allow issuance of non-Contract brands of non-exempt infant formula when supported with written medical documentation in accordance with CFR §246.10(d)(1)(i) & §246.16a(c)(9).

However, Iowa is the only State in the consortium that will allow issuance of milk and/or soy-based infant formula (excluding Exempt Infant Formula) by prescription in limited situations during the term of the Contracts that result from the IFB. Texas, Minnesota, and the Choctaw Nation of Oklahoma will not allow non-Contract brands of non-exempt infant formula even with written medical documentation during the term of the Contracts that result from this IFB except as specified in sections 2.8 and 2.9 of this Exhibit. All the States and CNO will continue to approve, and issue Exempt Infant Formula and WIC eligible nutritionals with medical documentation and in accordance with State and CNO policies.

2.12 May allow issuance of infant formula when supported by medical documentation to women, infant and child Participants who have a documented qualifying condition that requires the use of formula because the use of conventional food is precluded, restricted or inadequate to address their special nutritional needs.

2.13 The States and CNO may, at their sole discretion, obtain USDA waivers of regulatory requirements and, upon notifying the contract holder, immediately implement such waivers and/or any change in regulatory requirements.

2.14 Not provide Contractor access to any records, information, or combination of information individually identifying applicants, Participants or family members (7 CFR 246.26(d), WIC Policy Memorandum #2021-6).

2.15 Not provide Contractor access to any information about a WIC Vendor that individually identifies the Vendor, except for the Vendor's name, address, telephone number, website/email address, store type and authorization status. (7 CFR §246.26(e)).

3. Minimum Experience and Qualifications

Documentation of experience and qualifications must be submitted with Response.

The Bidder must have relevant experience required for the performance of the services as outlined in this Solicitation. The minimum formula Rebate experience required is two (2) years.

4. 24-Hour Contact

The Contractor must provide each State’s and CNO’s Contract Manager with 24-hour contact information for a minimum of two (2) Contractor personnel so the States and CNO may communicate urgent performance issues that require immediate correction or any other issues that may occur. The Contractor’s 24-hour contact must always be available. Any urgent performance issues requiring immediate correction will be followed up in writing by the State’s or CNO’s Contract Manager.

5. Confidentiality

Bidder must comply with all applicable State, CNO, and federal laws relating to the privacy, security and confidentiality of any data or information exchanged under any Contract.

Bidder must maintain appropriate procedural, administrative, physical and technical safeguards to prevent the release or disclosure of any data or information obtained under the Contract to anyone other than individuals who are authorized by law to receive such data and information and who will protect the data and information from re-disclosure as required by law. All data and information must be maintained in a secure location and in compliance with the terms of the Contract.

Bidder must use the data and information obtained under the Contract only for purposes described in the Contract and in accordance with the terms of the Contract.

https://www.fns.usda.gov/wic/policy-memorandum-2021-6

Exhibit G: Scope of Work (SOW) To Be Performed